The Water Utility Enterprise
Final June 1994
TD
225
S383
W4
1994
c.2
LIBRARY
Santo Clara Valley Water District
PREPARED BY
John W. Ryan
I-Wen (Elaine) Tsai
UNDER DIRECTION OF •
Jennie Micko, PE
Division Engineer
Program Analysis Division
Water Supply Planning Branch
DIRECTORIAL DISTRICTS
James M. Fiedler, PE Leo F, Coumoyer, PE
Head, Water Supply Water Supply Manager
Planning Branch
Robert R. Smith Ronald R, Esau
Assistant General Manager General Manager
District Board of Directors
Rosemary C. Kamei, Vice Chairperson District 1
Patrick T. Ferraro District 2
Robert W. Gross District 3
William A. Gissler District 4
James J. Lenihan, Chairman
Sig Sanchez
Joe Judge
District 5 •
At Large
At Large
Cover; Santa Teresa Water Treatment Plant
re, xx s S385 U t/hH c i
Board of Directors:
The availability of an adequate supply of water has been the focus of public attention over the past several years,
due in large part to 6 consecutive years of water supply shortages and the future implications of state and federal
legislation and regulations regarding imported water. While precipitation in San Jose was below average in this
past rainfall season, current storage in northern California and in District reservoirs and groundwater basins is
sufficient to meet District needs through 1994. Water usage for 1994 is anticipated to remain below predrought
levels with only a slight increase (3 percent) in water usage projected over last year due to a combination of
weather conditions, continued voluntary conservation, and low economic growth.
Although 1994-95 total expenditures are projected to increase by approximately 7.7 percent to $88.8 million,
1994-95 revenues are also anticipated to increase by approximately 4 percent to $86.8 million with minimal
impact on projected end of year total reserve balances. Accordingly, water charges for fiscal year 1994-95 are
unchanged at $240 per acre-foot and $108 per acre-foot for municipal and industrial water in Zones W-2 and
W-5, respectively. The treated water charge also remains unchanged at $310 per acre-foot. This reflects
maintaining the treated water surcharge at $70 per acre-foot. The agricultural charges remain $43.75 and $11.50
in Zones W-2 and W-5, respectively.
The services the District provides reflect the water utility mission-—to provide a water supply of adequate quantity
and quality to meet the desired quality of life in the community. In response to increasing costs to provide
essential services, the District continues to review its goals and objectives and to prioritize its programs. The
programs reflected in this report outline a plan for continuing the District’s commitment to providing a reliable
high quality water supply for all of Santa Clara County.
Ronald R. Esau
General Manager
PREFACE
This is the twenty-third annual report on the status of the Santa Clara Valley Water District’s Water Utility
Enterprise. In accordance with Section 26.5 of the District’s Act, the District annually prepares a written report
on the District’s activities on the protection and augmentation of the water supplies of the District. As required
by the District Act, this report provides information on the present and future water requirements of Santa Clara
County, the water supply available to the District, future capital improvement and maintenance and operating
requirements, financing methods, and the water charges by zone for agricultural water and nonagricultural water.
TABLE OF CONTENTS
Page
Executive Summary. 2
Recorded and Projected Water Requirements. 4
Recorded and Projected Water Supply . 5
Water Year 1992-93 Recorded Water Supply and Use . 6
Calendar Year 1993 Recorded Water Supply and Use (Acre-Feet). 8
Calendar Year 1994 Projected Water Supply and Use (Acre-Feet). 9
Future Capital Improvements. 10
Water Conveyance, Treatment, and Distribution System. 11
Sources of Revenue. 12
Water Utility Zones. 13
Summary of the Financial Picture. 14
Revenues and Expenditures for the Recorded Year (1992-93)... 16
Financial Estimates for the Current Year (1993-94). IF
Water Charges for 1994-95
Executive Summary
Local Supply
At the end of the rainfall year on June 30, 1994, local rainfall in the
1993-94 season was about 70 percent of the historical season average.
The surface water reservoirs were at about 50 percent of capacity, and
the groundwater basins contained about 273,000 acre-feet of usable water
supply.
Imported Supply
In 1994, the District expects to receive 50,000 acre-feet, or 50 percent,
of State Water Project entitlement water, 3,000 acre-feet of reallocated
State Water Project water, 4,000 acre-feet of State interruptible
entitlement, and 12,000 acre-feet of State Drought Water Bank water for
a total of 69,000 acre-feet of water through the State Water Project. The
District expects to receive 86,000 acre-feet, or 56 percent, of its
entitlement from the Bureau of Reclamation through the San Felipe
Division of the Central Valley Project. The San Francisco Water
Department is expected to deliver about 60,000 acre-feet of water to
retail agencies in the northern part of Santa Clara County in 1994.
Thus, the total imported water supply for calendar year 1994 is expected
to be about 215,000 acre-feet.
Water Demands
The expected water use in Santa Clara County during the 1994-95 fiscal
year is 346,000 acre-feet. This is 3 percent greater than the 1993-94
estimated water use. Of this, the District expects to supply 273,000
acre-feet.
The District, along with numerous other urban water agencies, is
participating in the statewide Water Conservation Memorandum of
Understanding to implement 16 urban water use Best Management
Practices. In addition, the District’s Board of Directors approved
additional water conservation measures in November 1993. In January
1994, the Board adopted the Water Conservation Plan submitted to the
Bureau of Reclamation in conformance with the Central Valley Project
2
Improvement Act (CVPIA). This plan addresses both urban and
agricultural water conservation in Santa Clara County.
Outlook for Fiscal Year 1994-95
With water usage projected to be 273,000 acre-feet, and no loss of
property taxes, District revenues are projected to be $86.8 million in
1994-95, up from $83.4 million in 1993-94. In addition to committing
approximately $18 million to construction projects, the District plans to
add $12 million to the Bureau of Reclamation Replacement
Appropriation.
Water Supply Programs
In an effort to provide adequate and reliable water supplies while
effectively managing water uses, the District continues to evaluate the
current and future water supplies.
Existing and proposed environmental regulations in the San Francisco
Bay-Delta continue to affect the District’s expected imported supplies.
Water supplies from the Delta are currently subject to water restrictions
to protect the winter-run salmon and to meet provisions of the CVPIA.
The CVPIA reduces the water exports from the Delta and imposes an
environmental fee in addition to water charges. The EPA is expected to
finalize its proposed Delta water quality regulations this year, while the
federal Fish and Wildlife Service will be receiving comments later this
year regarding their proposed Delta water quality requirements.
Concurrently, the District is pursuing water transfers, potential storage
facilities, and water exchange programs with other agencies.
Within the County, the District continues its conjunctive use programs
for recharging surface water to augment groundwater supplies. In
addition, the District will be providing financial contributions to agencies
delivering reclaimed water for nonpotable uses.
Water Quality
In its ongoing commitment to protect surface water and groundwater
quality, the District is facing new and more stringent drinking water
regulations that will result in increased expenditures for compliance.
Pilot plant studies of alternative disinfection processes started in March
1993. This year, plant-scale testing will occur. Modifications of the
disinfection processes for the three treatment plants are scheduled to meet
the first phase of regulation by 1998 and the second phase of regulation
by 2002. Other drinking water quality programs include the corrosion
control program.
Groundwater quality programs include the continuing administration of
the investigation and cleanup of fuel leaks, coordination with the
Regional Water Quality Control Board on investigation and cleanup of
solvent cases and landfills, the wellhead protection program, nonpoint
source pollution control program, and the development of watershed
management programs.
Capital Improvement Program
Phase I of the Raw Water Control System is complete and countywide
control is now available for most of the District’s conveyance, treatment,
and distribution system. Construction of Phase II began in January
1993. An Engineer’s Report for Lexington Dam Freeboard Restoration
is in progress. The Engineer’s Reports and environmental documents for
the Parallel East Pipeline and the San Pedro Recharge Facility in Morgan
Hill are completed. Design is proceeding on the San Pedro Recharge
Facility. Design for Stage I of the Parallel East Pipeline is completed.
In 1994-95, major construction expenditures are planned for additions to
the Raw Water Control System (Phase II), Parallel East Pipeline (Stage
I), San Pedro Recharge Facility, and Stevens Creek Pipeline
Replacement.
Operations and Maintenance Programs
The operating expenditures of the District continue to grow as the
District completes more water utility facilities and regulatory compliance
requires more resources. Plans for 1994-95 include finalizing the Water
Supply Overview Study, commencing an integrated water resources plan.
and expanding the water conservation and the watershed management
programs.
Financing Methods
In fiscal year 1994-95, the District anticipates that ad valorem taxes will
provide 22 percent of the water utility revenue, water charge revenue
72 percent, and interest and miscellaneous revenue 6 percent.
On June 23, 1994, the Board of Directors approved the sale of water
utility revenue bonds totaling $65.9 million at an interest rate of
5.2 percent. The bond proceeds were used to refund outstanding revenue
bonds having an average interest rate of 6.5 percent. By taking
advantage of the lower interest rates available in June, the water utility
markedly reduced its future interest costs.
Water Charges
Based on these expected expenditures and revenues, the water charges
for fiscal year 1994-95 remain the same as fiscal year 1993-94. These
charges are: $240 per acre-foot groundwater charge and equivalent basic
user rate for municipal and industrial water (M&I) in Zone W-2; $108
per acre-foot groundwater charge and equivalent basic user rate for M&I
water in Zone W-5; $43.75 for agricultural water in Zone W-2; $11.50
for agricultural water in Zone W-5, and $310 per acre-foot for treated
water sold under contract.
Recorded and Projected Water
Requirements
Water use in Santa Clara County is categorized as either agricultural or
M&I. Recorded fiscal year North County water use since 1964-65 and
South County water use since 1987-88 (when the District merged with
Gavilan Water Conservation District) are shown to the right. Metcalf
Road is the dividing line between North County Zone W-2 and South
County Zone W-5. The North County includes the Santa Clara Valley
Groundwater Subbasin while both the Coyote and Llagas Groundwater
Subbasins are in South County.
Water use in north Santa Clara County is predominantly M&I. Current
projections from the District’s 3993 Water Needs Study indicate an
increase through 2020 when the total North County annual water use is
projected to be 379,000 acre-feet. Agricultural water use is expected to
continue to decrease through the year 2020 to 3,000 acre-feet per year.
In south Santa Clara County, it is anticipated that M&I water use will
continue to increase while agricultural use will decrease. The continued
installation of meters in south Santa Clara County will improve the
reliability of water use data. The latest projections for south Santa Clara
County anticipate total water use of about 90,000 acre-feet per year by
the year 2020. M&I and agricultural water uses are projected to be
48,000 acre-feet and 42,000 acre-feet per year respectively.
North Santa Clara County, Zone W-2
Water Use (Thousands of Acre-Feet)
500-1 --—---
400 ~ ..
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
■ Recorded M&I EZ3 Recorded Agricultural
EO Projected M&I CD Projected Agricultural
South Santa Clara County, Zone W-5
The projected water needs discussed above and shown to the right,
reflect the effects of anticipated savings of 73,000 acre-feet per year by
the year 2000 from implementation of water conservation, best
management practices, and from plumbing code changes. Outdoor water
use that may be displaced in the future by reclamation is also included.
200
100
Water Use (Thousands of Acre-Feet)
l"l I II I I I I" I I I II | I | | | | | | |
tb
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
■ Recorded M&I EZ3 Recorded Agricultural
EHO Projected M&I CD Projected Agricultural
4
North Santa Clara County, Zone W-2
500
400
300
200
100
0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Water Supply (Thousands of Acre-Feet)
■ Recorded Imported \IA Recorded Local
H Projected Imported [3 Projected Local
[§§ Projected Reclamation
South Santa Clara County, Zone W-5
Water Supply (Thousands of Acre-Feet)
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Recorded Imported XIA Recorded Local
Projected Imported CD Projected Local
Projected Reclamation
Recorded and Projected Water
Supply
The District’s water supply includes water imported from the
Sacramento-San Joaquin Delta, local water stored in reservoirs and
groundwater subbasins, and reclaimed water.
Sources of water supply in north Santa Clara County consist of locally
developed water and water imported via the State Water Project’s South
Bay Aqueduct, the federal Central Valley Project’s San Felipe Division,
and the City and County of San Francisco’s Bay Division Pipelines.
South Santa Clara County is supplied by locally developed water and
water imported via the San Felipe Division. The recorded water supply
in north Santa Clara County since 1964-65 and South County since
1987-88 are shown to the left (data are for “water year” October 1
through September 30).
For the rainfall year ending June 30, 1994, local rainfall was about
70 percent of the seasonal average and deliveries from both the State
Water Project and the Central Valley Project are expected to be,
respectively, 50 and 56 percent of entitlements. Additional imported
water totalling 19,000 acre-feet is expected to be delivered through State
Water Project facilities.
Future local supplies are projected to be augmented by water from water
reclamation facilities in San Jose, Santa Clara, Sunnyvale, and
Gilroy/Morgan Hill.
5
Water Year 1992-93 Recorded Water Supply and Use
The water supply and use charts on pages 6 and 7 reflect the sources and Because the imported water contracts are for calendar years, pages 8 and
uses of water for both north and south Santa Clara County during the 9 present the recorded water supply and use for calendar year 1993 and
1992-93 water year (October through September). Positive changes in the projected water supply and use for calendar year 1994. Water use
storage in the groundwater basins, plus local water conserved in the in calendar year 1993 was 327,000 acre-feet, an increase of 5 percent
County’s reservoirs, add to the water supply for the following year. The over 1992.
rainfall at San Jose during the rainfall year from July 1992 through June
1993 was 130 percent of average.
WATER SUPPLY & USE
SOUTH SANTA CLARA COUNTY (ZONE W-5)
Water year October 1992 through September 1993
(Values in thousand acre-feet)
GROUNDWATER DELIVERIES <b)
6
(a) Includes 5,000 AF of increase in storage
(b) Groundwater & surface water deliveries based on fiscal year
(c) Uncontrolled strearaflows
LOCAL SUPPLIES IMPORTED SUPPLIES
WATER SUPPLY & USE
NORTH SANTA CLARA COUNTY (ZONE W-2)
Water year October 1992 through September 1993
(Values in thousand acre-feet)
H HETCH J1ETCHY DELIVERIES [55_
X6#H.RaV i ; L58J P-—
RAW WATER L»2J •
, > IJLT-j
167 18 ;
.rxgimwy'■■■■: ■■ '■••
K:;li|^^ra| STREAMS ’ CANALS > pipelines
.:>*&• ;.v'i .?Sp -
f «T#I^ 30 : ■
TREATED WATER DELIVERIES
SURFACE WATER DELIVERIES
i m
•'•^XXTUKaL .'.'"‘X.'j
RECHARCEi^,
[68]
RECHARGE I
facilities I
GROUND!
GROUNDWATER
.DELIVERIES
OTHER
RESERVOIRS
AND.STREAMSrjS
SJVVC
TREAT
V PLANT
lllfi TOTAL WATER
used rTsfTl
RAW WATER
(NON-POTABLE)
POTABLE WATER
(a) Includes 71,000 AF of increase in storage (including 5,000 AF of stored San Felipe water)
(b) Uncontrolled stream flows
7
Calendar Year 1993 Recorded Water Supply and Use (Acre-Feet)
Santa Clara Valley Subbasin
Surface Reservoirs
28,000
Groundwater
147.000
Subbasin Total
175,000
Coyote and Llagas Subbasins
Surface Reservoirs
9,000
Groundwater
35.000
Subbasin Total
44,000
San Benito County
San Justo Reservoir’
0
Total Beginning Storage
219,000
Imports:
Hetch Hetchy (71 percent of 76,000 AF) 54,000
State Water Project (63 percent of 98,000 AF) 62,000
San Felipe Division (52 percent of 152,500 AF) 80,000
San Felipe Carryover From 1992” 3,000
Local Supply:
San Jose Water Company 17,000
Santa Clara Valley Subbasin 182,000
Coyote and Llagas Subbasins 84,000
otal Supply <
Santa Clara Valley Subbasin
Surface Reservoirs
Groundwater
Subbasin Total
Coyote and Llagas Subbasins
Surface Reservoirs
Groundwater
Subbasin Total
San Benito County
San Justo Reservoir*
otal Storage Change
Santa Clara Valley Subbasin
Surface Reservoirs
Groundwater
Subbasin Total
Coyote and Llagas Subbasins
Surface Reservoirs
Groundwater
Subbasin Total
San Benito County
San Justo Reservoir*
'otal End of Year Storage
67,000
29.000
( 1 , 000 )
55.000
96,000
54,000
5,000
155,000
y. v.} /.V*,' oy«,v ■>..v."
::?,%*,%♦ ■:■ > v < •.
95,000
mm
271,000
8,000
90.000
98,000
5,000
Water from 1993 San Felipe allocation banked in San Benito County.
‘Portion of 1992 allocation received in 1993.
8
Calendar Year 1994 Projected Water Supply and Use (Acre-Feet)’
BE SlMBtNGiSreMG B^i
Santa Clara Valley Subbasin
Surface Reservoirs
Groundwater
Subbasin Total
Coyote and Llagas Subbasins
Surface Reservoirs
Groundwater
Subbasin Total
San Benito County
San Justo Reservoir
[Total End of Year Storage
83,000
176.000
20,000
90.000
259,000
110,000
5,000
374,0001
Imports:
Santa Clara Valley Subbasin
Surface Reservoirs
Groundwater
Subbasin Total
Coyote and Llagas Subbasins
Surface Reservoirs
Groundwater
Subbasin Total
San Benito County
San Justo Reservoir**
Total Storage Change
Santa Clara Valley Subbasin
(18,000)
(17,000)
-IL Q QQ-
(14,000)
( 6 , 000 )
(3,000)
(23,000)1
ftSTS'tVa f
Hetch Hetchy (79 percent 76,000 AF)
60,000
Surface Reservoirs
65,000
»
State Water Project (50 percent of 100,000 AF)
50.000
Groundwater
moofl
San Felipe Division (56 percent of 152,500 AF)
86,000
Subbasin Total
245,000
Reallocation of State Water***
3,000
Coyote and Llagas Subbasins
State—Interruptible Entitlement
4.000
Surface Reservoirs
3,000
State Drought Water Bank
12,000
Groundwater
101.000
Local Supply:
Subbasin Total
104,000
1
San Jose Water Company
10,000
San Benito County
Santa Clara Valley Subbasin
64,000
San Justo Reservoir"
2,000
Coyote and Llagas Subbasins
fotal Supply
25,000
314,0001
fotal End of Year Storage
North County Use
South County Use
[fotal Use
288,000
49,000
’Projected using data available from the 1994 Operations Report—subject to change.
"Reflects a 3,000 AF reduction of the 5,000 AF of San Felipe water banked in 1993.
’"District share of State water turned back by Metropolitan Water District of Southern California.
9
Future Capital Improvements
Future capital improvements influence the long-term financial plan;
however, each project requires the approval of the District’s Board of
Directors before construction.
The chart on this page shows schedules of major projects planned by the
Water Utility. Future projects include improvements to Lexington Dam,
additions to the Raw Water Control System, design and construction of
Parallel East Pipeline, Parallel West Pipeline, SCVWD—San Francisco
Water Department (SFWD) Intertie, disinfection modifications at all
three water treatment plants, and San Pedro Recharge Facility.
The map on the following page shows the location of the District’s major
existing and proposed facilities.
NEW FACILITY CONSTRUCTION PROGRAM
FOR THE WATER UTILITY ENTERPRISE
Fiscal Year 1992-93 Through 1999-00
PROJECTS
92 *93
93*94
94*95
96-96
96*97
97*98
98*99
99*00
RAW WATER
Raw Water Control System
eebI
ill'll'(If
SOURCE OF SUPPLY
Lexington Oan Freeboard Restoration
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rnmri m
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fi 1111 IT
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TREATED WATER T&D
Parallel West Pipeline
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IT 1,171
1111.11.11
11111,1111
III)
Parallel East Pipeline Stage I
1
TT* r "*i
mum
Parallel East Pipeline stage II
iiiitrrr
IHHIIE
LLI1IJ.IU
p-i-J
8CVWD-SFWD Intertie
TTTI Ill!
XI
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ILL! 1H l
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2
WATER TREATMENT i
AH a* hi nnF
TTTimrn
ED
pilot Plant
■
Disinfection Modification '
,
Rino,, Teresa, & Penlt, WTPs
Luun
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SOUTH COUNTY
tm
tti m irrm
illhY
ooii rvUi w nv^iwi yo
Land
Purchase
EIR, Engineer■«
Report, Design
ion
Construction
ilo Alto
nation PI,
:vwd/si
Vlntertie
■Penitenda Jreatment
& Delivery Main
> Upper Penitencia Cl
Pipelines
bunnyval
>istributa
Mountain View
Distributary'
Parallel West
Pipeline
^^Vason.
Stevens Ck.
Reservoir
Santa Teresa
reatment Flar
Rinconada Reservoir .
^ JSK
Rmconada X
Treatment Plaifr !
Reservoi
igas Pipeline
e Reservoir
.ervoir A
:o Pumping Plant
(USBR) \
iReservoi
Santa Clara Conduit
Modifications
San Jose/Santa Clara
Reclamation
Plant
^ '
EXISTING
PROPOSED
Treated Water Facility
Raw Water Facility
Water Treatment
Recharge Facility
Pumping Plant
Hydroelectric Facility
Reclaimed
Water Facility
Rinconada Force Main
Reservoir
Santo Clara Valley Water District
. • Pacheco Tunnel
'• . (USBR)
Water Conveyance,
Treatment and
Distribution System
June 1994
Prepared by Program Analysis Division
Water Supply Department
Santa Clara Tunnel
(USBR)
Sources of Revenue
The District’s Board of Directors, upon recommendation of the Santa
Clara Valley Water Commission, adopted the current water pricing
policy in 1971, This pricing policy incorporates two important concepts:
(1) a water pooling concept in which water for a given zone of benefit
is considered a single commodity with a uniform value regardless of
source or cost, and (2) a water management concept in which the user
pays for benefits received.
The District’s major water charges are:
• A groundwater charge and equivalent basic user charge which
are associated with the benefit of water consumption. The
groundwater charge is an excise tax applied to water extracted
from the groundwater basin in Zones W-2 and W-5 shown on the
map to the right. The basic user charge is applied to other types
of water delivered by the District. There are two rates, one for
agricultural water and one for M&I water. Revenue from these
charges pays for the general costs of providing water and for the
capital costs of constructing in-county facilities, either through
“pay as you go” financing or through debt repayment of bonds
and loans.
♦ A treated water surcharge which is associated with the benefit of
receiving treated water. It is levied in addition to the basic user
charge on water delivered from the District’s water treatment
plants.
Ad valorem taxes provide revenue to support several benefits which are
general in nature serving all or large areas of the County. Some of these
benefits are the availability of imported water to the County, recreation
associated with the District’s reservoirs, and the replenishment of the
County’s groundwater subbasins.
The District receives a portion of the 1 percent Countywide tax revenues
as allocated by the County Assessor. Prior to 1992-93, this was based
on pre-1978 District tax levies. Tax Zones W-3 and W-4, as shown on
the map on the facing page, as well as a Countywide ad valorem tax are
part of the 1 percent allocation. In 1992-93, 10 percent of the Water
Utility’s portion of the 1 percent allocation was reallocated as part of the
1992-93 State budget. It is possible that the Water Utility will be
impacted by further State reallocation of the 1 percent ad valorem tax in
1994-95 and beyond.
The District also levies additional ad valorem taxes under Article XIII A
of the State Constitution to meet: (a) prior approved general obligation
bond debt service in Zones W-l and W-6, which zones are shown on the
map to the right, and (b) part of the contractual obligations for State
Water Project water with a Countywide tax. These revenues could also
be impacted by the reallocation of tax revenues by the State Legislature.
To fund the construction of new facilities, the District has relied on both
pay-as-you-go financing and long-term debt financing from revenue
bonds as authorized by the voters in 1977. The last remaining 1977
authorized revenue bonds were sold in April 1984. In January 1984,
State legislation allowed the District to seek electorate authorization to
issue revenue bonds as needed following the Board of Directors’
approval. Santa Clara County voters approved this authorization in
November 1984. The District sold an additional $30 million of revenue
bonds in November 1985 to provide needed funding for ongoing
projects. In August 1986, the District refunded all outstanding water
revenue bonds. The refunding was for $94,935,000 at 6.8 percent
interest.
In June 1994, the District took advantage of favorable market conditions
to refund the remaining 1986 water revenue bonds. The 1994 rebinding
totaled $65.9 million at an interest rate of 5.2 percent.
13
Summary of
Future capital improvements, maintenance and operating requirements,
and financing methods are identified in the following pages.
The financial information in the table at the right summarizes the
revenues, expenditures, and balances presented in the following pages.
The corresponding rates are shown below. The expenditures shown are
funds actually spent in that fiscal year. Fiscal year 1993-94 construction
contract obligation is the sum of the anticipated construction expenditures
and the anticipated encumbrance balance for that year. Encumbrances
from fiscal year 1993-94 are anticipated to be expenditures in fiscal year
1994-95.
This financial picture reflects the District’s water management programs,
water supply and use, and the capital improvement programs outlined in
this report. Potential water supply shortages and efforts to reduce water
use affect the financial picture. The vulnerability of the District's
imported water sources, from both hydrologic and regulatory conditions,
requires that additional water supplies be planned for Santa Clara
County. The first priority of the Water Utility Enterprise is to have
sufficient ftmds to deliver water to existing customers. However, the
need to improve the reliability of the District’s water supplies and the
efficiency of the in-county distribution system requires continuing
investments in existing and new facilities. The projected financial picture
for 1994-95 incorporates the managerial and engineering assessments of
expenditures necessary to meet current operational needs, as well as to
invest in system improvements in 1994-95. The water charges
summarized below show the historical progression of wholesale charges
necessary to finance District programs to meet the water needs of Santa
Clara County.
SUMMARY OF WATER CHARGES
(Dollars per Acre-Foot)
1990-91
1991-92
1992-93
1993-94
1994-95
Zone W-2
Basic User Municipal and Industrial
175.00
262.00
262.00
240.00
240.00
Basic User Agricultural
43.75
43.75
43.75
43.75
43.75
Contract Treated Water Surcharge
70.00
70.00
70.00
70.00
70.00
Zone W-5
Basic User Municipal and Industrial
46.00
117.00
117.00
108.00
108.00
Basic User Agricultural
11.50
11.50
11.50
11.50
11.50
Actual
Actual
1990-91
1991-92
Revenues
Bond Sales, Loans, Grants
$0
$0
Property Taxes
$16,769,000
$17,653,000
Interest
$5,138,000
$5,912,000
Groundwater Charges
$17,346,000
$28,975,000
Surface Water Charges
$253,000
$223,000
Reclaimed Water Sales
$2,000
$4,000
Treated Water Sales
$23,133,000
$31,815,000
Miscellaneous
$1,727,000
$1,047,000
Total Revenues
$64,368,000
$85,629,000
Expenditures
New Facility Construction
$8,994,000
$6,932,000
Administration
$3,130,000
$2,262,000
Planning
$6,124,000
$7,596,000
Maintenance
$7,220,000
$6,143,000
Operations
$14,984,000
$14,202,000
Construction, General
$2,135,000
$3,271,000
Imported Water Purchases
$15,886,000
$16,084,000
Debt Service
$11,191,000
$11,119,000
Total Expenditures
$69,664,000
$67,609,000
Balances
Encumbrances
$8,543,000
$19,867,000
In-County Distribution System Appropriation
$32,664,000
$29,633,000
San Felipe O&M Reserve
$800,000
$1,178,000
Contingency Appropriation
$1,000,000
$775,000
Replacement Appropriation
$4,306,000
$4,306,000
Bureau Replacement Appropriation
$6,100,000
$15,674,000
Supplemental Water Supply Appropriation
$0
$0
Total Balances
$53,413,000 $71,433,000
The Financial Picture
Actual Estimated Projected
1992-93 1993-94 1994-95
$1,643,000
$18,059,000
$3,876,000
$28,569,000
$317,000
$4,000
$31,943,000
$3,254,000
$87,665,000
$12,041,000
$2,201,000
$6,075,000
$7,157,000
$15,812,000
$3,771,000
$13,139,000
$11,124,000
$71,320,000
$10,267,000
$24,080,000
$1,329,000
$1,000,000
$4,491,000
$28,611,000
$18.000.000
$0
$18,272,000
$3,046,000
$28,278,000
$153,000
$ 1,000
$31,620,000
$2,049,000
$83,419,000
$7,582,000
$3,136,000
$6,775,000
$8,394,000
$21,030,000
$7,454,000
$16,900,000
$11.158,000
$82,429,000
$0
$23,282,000
$1,508,000
$1,000,000
$5,000,000
$37,178,000
$20,800.000
$0
$18,720,000
$3,364,000
$29,729,000
$153,000
$ 1,000
$32,550,000
$2,282,000
$86,799,000
$8,147,000
$6,226,000
$8,825,000
$8,711,000
$23,036,000
$4,721,000
$17,964,000
$11,172,000
$88,802,000
$5,041,000
$4,668,000
$1,629,000
$1,000,000
$5,150,000
$49,277,000
$20,000.000
$87,778,000 $88,768,000 $86,765,000
15
Revenues and Expenditures
The financial picture of the Water Utility Enterprise has been separated
into three parts; revenues, expenditures, and year-end fund balances.
The major sources of revenue are treated water charges, groundwater
charges, taxes, and interest. The various components of the total
revenue received by the District in fiscal year 1992-93 (July 1 through
June 30) are shown to the right.
Total annual expenditures are operating and nonoperating costs.
Operating costs include labor and contract service for District programs.
Nonoperating costs are construction projects and general obligation bond
repayment. Purchased water is the amount paid to the state and federal
agencies for imported water. Also included is debt service which is the
repayment of bonds sold to finance new facility construction. The actual
expenditures for fiscal year 1992-93 are shown to the right.
The year-end fund balances, the third element of the financial picture,
have been appropriated for specific purposes. The various year-end fund
balances include:
1. The In-County Distribution System Appropriation which will
finance construction of necessary facilities of the In-County
Distribution System. This balance may include monies received
from bond sales, taxes, water charges and other revenues.
2. The Contingency Appropriation which is an amount set aside to
meet unforeseen expenditure needs that may arise.
3. The Replacement Appropriation which sets aside funds to
replace major equipment items at the end of their useful lives.
4. Encumbrances which consist of appropriations committed but not
spent by the end of the fiscal year.
5. The San Felipe O&M Appropriation which sets aside funds for
unanticipated operations or maintenance costs on the San Felipe
Division.
16
6. The Bureau Replacement Appropriation which sets aside funds
for repayment of the District’s long-term obligation to the Bureau
of Reclamation above current year water service contract
obligations.
7. The Supplemental Water Supply Appropriation which sets aside
funds to purchase additional water when needed, and to help
finance reclamation and water storage projects.
In addition to the foregoing balances held by the District, a debt service
reserve fund is held by the District’s fiscal agent to meet any deficiencies
that may occur in meeting the revenue bond debt service. The amount
on deposit is equal to 10 percent of the proceeds from the 1994
refunding or $6,591,500.
The available fund balances at the beginning of 1992-93 totaled
$71,433,000. The 1992-93 ending balances for District appropriations
are shown to the right.
1992-93 FINANCIAL PICTURE
For the Recorded Year
(1992-93)
BOND SALES,
LOANS, GRANTS
($ 1 , 643 , 000 )
PROPERTY TAXES
($ 18 , 059 , 000 )
INTEREST
($ 3 , 876 , 000 )
GROUNDWATER CHARGES
($ 28 , 569 , 000 )
SURFACE WATER CHARGES
($ 317 , 000 )
RECLAIMED WATER
($ 4 , 000 )
TREATED WATER SALES
($ 31 , 943 , 000 )
MISCELLANEOUS
($ 3 , 254 , 000 )
TOTAL = $87,665,000
/ / / / / / /
* y y y y y y y
////'///s DEBT SERVICE
■yyyvvvv* ($11,124,000)
y s / s s s s
f /SSS///S/S/SSSS
'SSS/ffSSSSSSSfS
'Sf/SSSS/fS/SS/S
CONSTRUCTION,
NEW FACILITIES
($ 12 , 043 , 000 )
PLANNING
($ 6 , 075 , 000 )
CONSTRUCTION,
[iiiiiv/AiiivM general
($ 3 , 771 , 000 )
MAINTENANCE
($ 7 , 157 , 000 )
OPERATIONS
($ 15 , 812 , 000 )
ADMINISTRATION
($2,201,000)
WATER PURCHASE
($ 13 , 139 , 000 )
TOTAL =$71,322,000
SUPPLEMENTAL
WATER SUPPLY
APPROPRIATION
($ 18 , 000 , 000 )
ENCUMBRANCES
($ 10 , 267 , 000 )
BUREAU
REPLACEMENT
APPROPRIATION
($ 28 , 611 , 000 )
IN-COUNTY
DISTRIBUTION
SYSTEM
APPROPRIATION
($ 24 , 080 , 000 )
OTHER
($ 6 , 820 , 000 )
TOTAL=$87,778,000
INCLUDES SAN FELIPE O&M APPROPRIATION, CONTINGENCY APPROPRIATION, AND REPLACEMENT APPROPRIATION
17
Financial Estimates
Preliminary estimates of revenues, expenditures, and year-end balances
for the 1993-94 fiscal (July 1 through June 30) year are shown in the
chart on the opposite page.
The groundwater sales revenue for 1993-94 is based on the basic user
rate. In Zone W-2, the M&I rate is $240.00 and the agricultural rate is
$43.75 per acre-foot. In Zone W-5, the M&I rate is $108 and the
agricultural rate is $11.50 per acre-foot.
The contract treated water sales revenue for 1993-94 is based on the
basic user rate of $240.00 and the treated water surcharge rate of $70.00
for a combined rate of $310.00 per acre-foot.
Estimated revenue from property taxes include income from the
1 percent allocation ($7,376,000), from debt services taxes ($2,222,000),
and from the State Water Project Tax ($8,674,000).
The estimated 1993-94 construction expenditures shown are not the total
contract amounts. Only the estimated dollars spent (cash outflow) during
the year are shown in the chart and in the table on this page as
expenditures. The remaining contract amounts encumbered for
expenditures in future years are included in the year-end balances.
In accordance with District’s imported water contracts, the costs of
imported water are estimated to be $9,900,000 for water from the South
Bay Aqueduct of the State Water Project and $7,000,000 for water from
the San Felipe Division of the federal Central Valley Project. In
addition, the District has set aside, but did not pay, $8,567,000 to cover
the Bureau’s estimates of allocated costs and interest charges.
MAJOR CAPITAL IMPROVEMENTS
CURRENT YEAR CASH OUTFLOW
(Estimated)
Project
Fiscal Year
1993-94
Milpitas Pipeline
$1,789,000
Raw Water Control System (Phase II)
733,000
Parallel East Pipeline (Stage I)
903,000
San Pedro Recharge Facility
272,000
Lexington Dam Freeboard Restoration
194,000
TOTAL
$3,891,000
18
1993-94 FINANCIAL PICTURE u
For the Current Year
(1993-94)
U ESTIMATED IN MARCH 1994
1/ INCLUDES SAN FELIPE O&M APPROPRIATION, CONTINGENCY APPROPRIATION, AND REPLACEMENT APPROPRIATION
19
Financial Projections
Projected revenues for fiscal year 1994-95 are shown on the opposite
page. In Zone W-2, the groundwater rates are $240 per acre-foot for
M&I water and $43.75 per acre-foot for agricultural water for 1994-95.
The treated water surcharge rate for 1994-95 is $70 per acre-foot for a
total treated water charge of $310 per acre-foot. In Zone W-5, the rates
for groundwater extraction and raw surface water for 1994-95 are $108
per acre-foot for M&I water and $11.50 per acre-foot for agricultural
water. In 1994-95 total County water usage is projected to be 346,000
acre-feet, a slight increase over 1993-94.
The revenue from the District’s share of the I percent allocation is
assumed to continue. These property tax revenues were not affected by
the 1994-95 State budget, but may be affected in the future by the State
legislature.
Projected expenditures for 1994-95 include costs to operate and maintain
the existing facilities; costs to purchase water from the State Water
Project and the federal Central Valley Project; payment of Delta
Environmental mitigation fees; and the planning, design, and
construction of new facilities to enhance service and comply with state
and federal regulation.
The projected 1994-95 expenditures shown on the opposite page and in
the table on this page are anticipated expenditures in the fiscal year, not
the full contract amounts. Estimated dollars remaining to fulfill
outstanding contract obligations are shown as encumbrances at the end
of 1994-95.
The cost of the imported water from the State Water Project is estimated
at $10,700,000 in 1994-95. Funding for imported water from the federal
Central Valley Project in 1994-95 is projected at $18,374,000 to cover
the contract obligation of $6,275,000 and the addition of $12,099,000 to
the Bureau Replacement Appropriation. Beginning in October 1993, the
Central Valley Project Improvement Act imposed environmental
restoration fees on Federal Central Valley Project water exported from
the Delta, These fees are projected to cost the District $989,000 in
1994-95.
MAJOR CAPITAL IMPROVEMENTS
PROJECTED CASH OUTFLOW
Project
Fiscal Year
1994-95
Milpitas Pipeline
$ 18,000
Raw Water Control System (Phase II)
407,000
Parallel East Pipeline (Stage I)
4,285,000
Lexington Dam Freeboard Restoration
525,000
San Pedro Recharge Facility
854,000
Stevens Creek Pipeline Replacement
1,421,000
TOTAL
$7,510,000
PROJECTED TAX REVENUES
Fiscal Year
Tax
1994-95
State Water Project Tax
$ 9,024,000
Debt Service Taxes
2,172,000
County Allocation of Taxes
7,524,000
TOTAL TAX REVENUE
$18,720,000
For the Next Fiscal Year
(1994-95)
PROJECTED 1994-95 FINANCIAL PICTURE
BUREAU
REPLACEMENT
APPROPRIATION
($ 49 , 277 , 000 )
IN-COUNTY
DISTRIBUTION
SYSTEM
APPROPRIATION
($ 4 , 668 , 000 )
2 /
OTHER
($ 7 , 779 , 000 )
TOTAL = $86,799,000
TOTAL =$88,802,000
TOTAL =$86,765,000
J1/ ESTIMATED IN JUNE 1994
21
Water Charges
In accordance with Section 26.5 of the District Act, the following pages report the water charges for 1994-95 by zone for agricultural and nonagricultural
water.
Groundwater charges and equivalent basic user rates which are to be levied in 1994-95 in Zone W-2 and Zone W-5 are summarized in Table I and
Table II, respectively.
TABLE I
FOR FISCAL YEAR 1994-95
Groundwater Charges and Basic User Rates in Zone W-2
Agricultural Water (Ag)
$43.75/Acre-Foot
Nonagricultural Water (M&I)
$240.00/Acre-Foot
TABLE II
FOR FISCAL YEAR 1994-95
Groundwater Charges and Basic User Rates in Zone W-5
Agricultural Water (Ag)
$11.50/Acre-Foot
Nonagricultural Water (M&I)
$108,00/Acre-Foot
for 1994-1995
WATER COMPONENTS AND WATER CHARGES
For Fiscal Year 1994-95
Components
Charges |
Component
Rate (AF)
Type of Charge
AG Water (AF)
M&I Water (AF)
Basic User, Zone W-2
Groundwater
Agricultural
$ 43.75
Zone W-2
$ 43.75
$ 240.00
Municipal and Industrial
240.00
Zone W-5
11.50
108.00
Basic User, Zone W-5
Surface Water 1
Agricultural
11.50
Evergreen Deliveries 2
228.00
N/A
Municipal and Industrial
108.00
Half Road Deliveries 3
26.00
122.50
Other Zone W-5 Deliveries 4
23.25
119.75
Treated Water Surcharge
Other Zone W-2 Deliveries 5
55.50
251.75
Contract
70.00
Minimum Charge - Zone W-5 6
81.00
81.00
Noncontract
50.00
Minimum Charge - Zone W-2 7
180.00
180.00
Water Master
11.75
Stored Water
Zone W-2
43.75
240.00
Capital Cost
Zone W-5
11.50
108.00
Half Road Lateral System
2.75
Treated Water 8
|
Contract
N/A
310.00
1
Noncontract
N/A
290.00
Reclaimed Water
Gilroy
20.00
80.00
' Surface water charge is the sum of the basic user plus the water master. It also includes the capital cost and power wherever applicable.
2 Evergreen agricultural delivery charges for 1992 through 1995 equal the 1988-89 rate ($72.00/AF) plus 50 percent of the City of San Jose’s wheeling charge. The
District no longer delivers M&I water to the Evergreen Area.
3 Half Road = Basic User (AG or M&l @ $11.50 or $108.00) + Water Master ($11.75) + Capital ($2.75).
4 Other Zone W-5 Deliveries = Basic User (AG or M&I @ $11.50 or $108.00) + Water Master ($11.75).
5 Other Zone W-2 Deliveries = Basic User (AG or M&I @ $43.75 or $240.00)+ Water Master ($11.75).
6 Minimum Charge W-5 = 0.75 X Basic User W-5 (M&I @ $108.00).
7 Minimum Charge W-2 = 0.75 X Basic User W-2 (M&I @ $240.00).
8 Treated Water Charge is the sum of Basic User ($240.00) and Treated Water Surcharge ($70.00/AF).
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